The annual Beidaihe seaside gathering is one of the most famous events in the Chinese Communist Party's calendar, when top cadres get to unwind, swim and formulate policy in a relaxed environment before heading back to Zhongnanhai in Beijing for the next plenum.

This year, president Xi Jinping and other members of the central committee of the politburo were discussing the party’s fourth plenary session in October, expected to yield further economic reforms.

The Beidaihe meeting takes place against the backdrop of a major crackdown on corruption and extravagance by senior cadres, and one of the main topics of discussion was finding ways of cutting salaries at state-owned companies.

Some of the senior executives at China’s state-owned enterprises face 50 per cent cuts in income, especially those working in the state banks and in the finance sector.

"China will gradually regulate the income distribution system at state-owned enterprises to make salary levels appropriate, salary structures reasonable, and strictly manage and supervise the system," said Mr Xi.

In future, top managers will not be able to have excessive spending beyond what has been stipulated by government regulations or companies’ financial policies, according to a statement posted on the central government’s website.

Reform of China’s thousands of state-owned enterprises, 113 of which are administered by the central government, has been a major factor in the country’s economic rise. Many of the enterprises are monopolistic and corrupt.

According to the Xinhua news agency, the average annual salary of executives at centrally administered state owned enterprises ranged from €80,000 to €86,000 in 2010 and 2011, which is much higher than the pay of most civil servants.

In February last year, state- owned enterprises were ordered to impose ceilings on payments to state-appointed senior management as well as ensure senior executives’ salary growth was slower than that of ordinary employees.